Forex news for Asia trading on Monday 21 June 2021
- Japan equity longs holding onto hopes the BOJ will be in buying today
- Gold is off its lows, lower US yields in Asia helping
- AUD this low "not justified" - 2 reasons why
- Westpac on the US Federal Reserve timeline for taper and hiking
- PBOC leaves 1 year and 5 year LPR unchanged, 3.85% and 4.65% respectively
- Australia preliminary retail sales for May +0.1% m/m (expected +0.4%)
- PBOC sets USD/ CNY reference rate for today at 6.4546 (vs. Friday at 6.4361)
- US President Biden will be meeting market regulators Monday (1645 GMT)
- South Korean exports continue to perform very strongly
- ASB is looking for RBNZ rate hikes early next year.
- China financial media report some banks have cut rates on deposit certificates
- UK data - Rightmove house price indicator for June +0.8% m/m (prior +1.8%)
- HSBC is not so sure on earlier RBA rate hikes - all about low inflation
- Canada government to hold a press conference Monday to discuss border closure
- China economic powerhouse Guangdong "hit with perfect storm of power grid uncertainty"
- US has extended its ban on non-essential travel with Canada, Mexico through to July 21
- Weekend - Australia has filed a complaint to the WTO over China's tariff's on Australian wine
- Weekend - Authorities in Chinese province Sichuan ordered cryptocurrency mining projects closed
- ECB President Lagarde (weekend comments): we made good progress in shaping future monetary policy strategy
- Trade ideas thread - Monday 21 June 2021
- UK media reports the UK lockdown will not be lifted on July 5
- Monday morning open levels - indicative FX rates - 21 June 2021
- More on Westpac forecasting an RBA cash rate hike in early 2023
It was an active opening to the week with follow through moves from the US equity market drop on Friday hitting Japanese stocks particularly hard. At the Tokyo lunch break:
- Nikkei is down 3.4%
- TOPIX is down 2.5%
As I post there is so far no sign of the Bank of Japan buying (TOPIX) ETFs. They last bought back on April 21.
The risk-off move ... well it wasn't a risk-off move at all. AUD and NZD both moved substantially higher (for an Asian range day) with AUD/USD up around 40 points from its lows while NZD/USD up a similar amount circa +40 points. Fresh news and data were light only.
EUR didn't do too much, yen and GBP added on a few points against the big dollar. Oil traded higher still, CAD added a few points. .
US yields dropped during the Asian session here, the 10 year and 30 year USTs to lows not seen since early March and February respectively. Dropping yields gave gold a bit of a spark, up a little more than 10USD from its low.
The People's Bank of China set its one- and five- year loan prime rates at unchanged levels for the 14th month in a row.
Bitcoin had an active weekend, dropping under $33,500 at one stage before staging a solid rally back above $36K. Its circa $35K as I update though. Chinese tightening of regulation of mining and transactions continues to ratchet higher (see bullets above).
Gold eked out a small bounce:
And, something the equity longs may not be too happy about. Bullard is speaking again today during the US session. Bullard is head of the Atlanta Fed, on Friday his comments sent US stocks tumbling. NY Fed head Williams speaks also.